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Currencies GBP/USD

GBP/USD Approaches 39-Month High as US-EU Trade Tensions Ease and BoE Rate Cut Odds Fade

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  • May 27, 2025
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GBP/USD pair maintains its bullish run, trading close to a 39-month high of 1.3593 as risk appetite improves in the markets. US Dollar drops as easing of US-EU trade tensions, after President Trump’s tariffs delay, combined with increasing worries about the US fiscal outlook linked to the proposed “One Big Beautiful Bill,” counters any strength from yesterday’s data. The Pound Sterling, however, gets stronger as hotter-than-forecast UK inflation and retail sales data lead to traders reducing bets for hostile rate cuts from the Bank of England. The pairing of a weaker USD and more resilient GBP has boosted the pair’s sustained rally. KEY LOOKOUTS • Market attention will stay focused on future UK economic data, particularly inflation and employment numbers, that may determine the Bank of England’s future actions on interest rates. •  Investors are monitoring the fate of Trump’s “One Big Beautiful Bill” in the Senate, whose potential to increase the fiscal deficit might still be a drag on the US Dollar. •  Any trade negotiation news or changes between the EU and the US could play a major role in affecting risk sentiment and USD strength. •  Traders will watch if GBP/USD can convincingly move above the 39-month peak of 1.3593, which would make the door open to more bullish strength. In the coming weeks, traders will stay focused on major economic data releases from the UK, such as future inflation and employment figures, for additional hints regarding the direction of policy at the Bank of England. A persistent change in rate cut expectations could further buoy the Pound. In the US, news regarding President Trump’s intended “One Big Beautiful Bill” and its effects on the fiscal deficit might continue to put pressure on the US Dollar, particularly in case concerns over increasing debt continue. Furthermore, any shift in the tone of US-EU trade relations can affect market risk appetite and create volatility in the GBP/USD pair. Technically, a clean break above the 39-month high of 1.3593 would indicate additional room for the currency pair to move higher. Pound traders are waiting to see UK data and BoE policy cues as diminished rate cut hopes keep the Pound supported. Against this backdrop, US fiscal issues and softening US-EU trade tensions keep the Dollar under pressure. A breakout above 1.3593 may prompt additional gains in GBP/USD. •  GBP/USD hovers at a 39-month high of 1.3593 on the back of unwavering bullish momentum. •  US Dollar drops on damping US-EU trade tensions and escalating fiscal deficit fears. •  President Trump postpones EU tariff deadline, enhancing market risk appetite. •  Trump’s suggested “One Big Beautiful Bill” sparks fears of a $3.8 billion addition to the US deficit. •  Higher US bond yields may persistently drive high borrowing costs, weighing on the USD. •  Faster-than-anticipated UK inflation and retail sales lower the expectations of dovish BoE rate cuts. •  Technical interest continues at the 1.3593 resistance level, with a breakout indicating potential for additional GBP/USD gains. GBP/USD pair is well-supported as sentiment continues to improve due to decreasing trade tensions between the United States and the European Union. The last-minute postponement of US tariff action against the EU, after a call between European Commission President Ursula von der Leyen and President Trump, has given investor sentiment a boost and supported risk-taking. This has put a bearish squeeze on the US Dollar, which is already weak due to increasing worries over the nation’s fiscal prospects. The suggested “One Big Beautiful Bill,” comprising tax cuts and higher spending, is set to widen the US deficit by $3.8 billion, triggering concerns about economic stability in the long term. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView Simultaneously, the British Pound is strengthening as investors rethink expectations over UK monetary policy. April’s recent retail sales and inflation data were hotter than anticipated, prompting markets to revise downwards expectations of large interest rate reductions by the Bank of England. Traders now price just one possible rate reduction in 2025 and a 50/50 chance of a second, futures data quoted by Reuters show. This more aggressive tone has contributed to the appeal of the Pound, particularly as economic data provides evidence of robustness in consumer spending and inflation pressures. TECHNICAL ANALYSIS GBP/USD is continuing its strong uptrend, consolidating short of the 39-month high of 1.3593. The pair has been underpinned by sustained buying interest, with momentum indicators like the RSI remaining in bullish conditions, suggesting underlying strength. The key support is seen at the 1.3550 region, which has served as a good base in recent sessions. A decisive break above the resistance of 1.3593 may set the stage for more upside, while inability to hold above support may result in short-term consolidation. FORECAST If the positive mood persists and UK economic indicators continue to be robust, GBP/USD may move further higher. The dissolving hopes of aggressive rate cuts by the Bank of England, coupled with a weak US Dollar on the back of fiscal worries and better global risk appetite, could promote further gains. If such factors hold, the pair will look to set new highs at higher levels than of late, especially if future data continues to assert the UK’s economic robustness. Yet, any surprise decline in UK economic signals or change in Bank of England tone towards dovishness can put pressure on the Pound. On the other hand, if US fiscal worries recede or safe-haven demand for the Dollar comes back—perhaps prompted by renewed geopolitical tensions or soft global growth numbers—GBP/USD is likely to be under pressure. Renewed trade tension between the US and EU or political turmoil can also adversely influence overall market sentiment, cap the pair’s rally potential.

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Currencies GBP/USD

GBP/USD Moves Beyond 1.3300 on Moody’s Downgrade of US Credit Rating, Sterling Boosted by UK GDP

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  • May 19, 2025
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GBP/USD currency pair has moved towards about 1.3300, helped by a soft US Dollar after Moody’s cut the US credit rating from Aaa to Aa1 due to increasing debt and fiscal difficulties. The downgrade, following in the footsteps of Fitch’s and S&P’s previous actions, put further pressure on the Greenback, which was already struggling from soft US economic data and increasing expectations for Federal Reserve rate cuts. The Pound Sterling, however, added strength following improved-than-anticipated UK GDP data, stoking speculation that the Bank of England would leave interest rates unchanged. Though alleviating global trade tensions and diplomatic progress might provide some boost to the USD, the prevailing momentum is in favor of the Pound. KEY LOOKOUTS • Market attention is still on the forthcoming US economic data and Fed comments, which can firm or change rate-cutting expectations in later this year. • Further robustness in UK data, particularly inflation and jobs figures, could impact the Bank of England’s policy and enable more GBP gains. • US-China trade talks and US-Iran nuclear discussions developments may influence general market mood and the path of the US Dollar. • Market participants will pay close attention to the response to Moody’s downgrade and Washington fiscal policy actions that could influence long-term USD stability. Several key drivers will impact the GBP/USD pair. Market participants will watch closely for the initial US economic data and Federal Reserve commentary in the next few weeks for indications of the potential for interest rate cuts and the timing thereof. Meanwhile, increasing evidence of stability in UK economic readings, especially in terms of inflation and employment, might support expectations that the Bank of England will keep or even increase its current policy stance. Also, advances in international geopolitics—like improvements in US-China trade negotiations and US-Iran nuclear talks—will influence risk sentiment and the US Dollar’s performance. Lastly, ongoing examination of the US fiscal outlook after Moody’s credit downgrade will put additional long-term pressure on the Greenback if worries over debt sustainability increase. GBP/USD currency pair is being upheld by robust UK GDP numbers and a diminishing US Dollar after Moody’s credit downgrading. Market participants are looking to future Fed indications and geopolitical events for guidance. US fiscal fears and expectations of rate cutting continue to weigh on the Greenback. • GBP/USD is quoting around 1.3300, underpinned by a soft US Dollar and robust UK economic numbers. • Moody’s lowered the credit rating of the US from Aaa to Aa1 based on increasing debt and interest burdens. • US economic statistics are weak, raising expectations of Federal Reserve rate cuts later in the year. • UK GDP came in higher than forecasts, supporting confidence in the Pound and easing pressure on the Bank of England to cut rates. • US consumer sentiment dropped sharply, with the University of Michigan Index dropping to its lowest level since June 2022. • Global trade optimism increases as the US and China weigh major tariff cuts. • Geopolitical events, including possible US-Iran nuclear negotiations and US-Russia diplomacy, are likely to impact market sentiment. The British Pound has maintained resilience in recent trading periods, inspired by both home-based economic robustness and increasing adversity within the US economy. The release of better-than-anticipated UK GDP data has enhanced confidence in the nation’s economic performance and hinted at steady growth momentum. Such positive data has inspired speculation that the Bank of England will continue with its existing policy stance, particularly if inflationary pressure continues to be present. Consequently, sentiment towards the Pound from investors is generally positive. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView The US Dollar, by comparison, has come under pressure after the move by Moody’s to lower the US credit rating on the basis of fear over increasing federal debt and interest payments. This comes on top of the more general fears that already exist as a result of a string of less positive US economic indicators. In the meantime, events on the international front—such as reports of a US-China trade agreement and possible diplomatic developments in Iran and Russia—are watched closely, as they have the potential to impact general market sentiment and risk appetite over the next few weeks. TECHNICAL ANALYSIS GBP/USD exhibits high bullish momentum as it trades close to the 1.3300 level, an important psychological and resistance area. The couple has managed to come back from the recent lows successfully with the support of fresh buying interest and weakness in the US Dollar. In the event that the uptrend fails not, the subsequent resistance would be experienced around 1.3350, while minor support would be experienced at 1.3250. Further upside potential might be signified by a break above 1.3300, but the traders will be waiting for signs of consolidation or pullback in this area before affirming direction. FORECAST GBP/USD may push higher even further, particularly if future UK economic indicators continue to be robust and the Bank of England continues to be hawkish. Continued breaking above resistance at 1.3300 might set the stage for 1.3350 and potentially 1.3400 short term. Further weakening in the US Dollar, spurred by expectations of dovish Fed policy or persistent fiscal concerns, would also facilitate this advance. Upsurge in world trade or geopolitical negotiations may also further augment market sentiment in the Pound’s favor. The potential for a slowdown in the UK economy or change in the tone of the Bank of England in favor of rate cuts could adversely put pressure on the Pound. If US data begins to indicate recovery or the Fed hints at less dovish policy, the US Dollar could regain traction. A move below the 1.3250 support level would help induce further selling pressure, likely sending the pair to 1.3200 or lower. Doubt surrounding worldwide diplomatic talks or bearishness in general markets could induce a risk-off scenario as well, helping the US Dollar as a safe-haven currency.

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Currencies GBP/USD

GBP/USD Dips below 1.3300 as UK Confidence Fades and USD Gains in Tariff Shift Talks

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  • April 25, 2025
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GBP/USD exchange rate dipped below the 1.3300 level in Friday’s Asian session under pressure from a mix of damped UK consumer confidence and US Dollar strength. Pound Sterling was put under pressure after April’s GfK Consumer Confidence index fell to -23, its lowest level since November 2023, on the back of increased living expenses and international trade uncertainty. At the same time, the Greenback picked up strength after news came out that China might put its 125% tariffs on certain US imports on hold, propelling market expectations of US trade talks. Though US Initial Jobless Claims just missed forecasts at 222,000, general sentiment is still in favor of the USD leading up to key data releases throughout the day. KEY LOOKOUTS • Market participants are particularly focused on the forthcoming UK Retail Sales announcement, which has the potential to provide new data on consumer activity and shape short-term Pound movements. • This prominent indicator will assist in determining US consumer confidence and potentially drive expectations of Fed policy, influencing the USD. • Markets are responding to news that China is likely to suspend its 125% tariff on some US imports. Any confirmation or denial by the authorities could change global risk sentiment and favor the Dollar. • Although there was a marginal increase in US Initial Jobless Claims, the fall in Continuing Claims indicates mixed labor conditions, which can influence investor expectations regarding economic strength and Fed rate moves. Investors are looking to some major developments which may have a bearing on the GBP/USD direction in the short term. The next UK Retail Sales data will be key in determining the resilience of local consumption with decreasing consumer confidence. In the United States, the final result for the Michigan Consumer Sentiment Index will reveal more about household perceptions, potentially altering Federal Reserve assumptions. While all of this is going on, news that China can suspend its 125% tariff on some US imports has given hope to global trade, supporting the US Dollar. Plus, confusing news from US labor data—increasing Initial Jobless Claims offset by decreasing Continuing Claims—are keeping traders on their toes as they wait for additional economic reports. Traders are targeting UK Retail Sales and US Michigan Consumer Sentiment data for new market guidance. In the background, news that China may ease tariffs on imports from the US is helping support the Dollar. Uncertainty-creating mixed US labor data still hangs over the outlook. • A key consumer spending gauge capable of influencing the strength or weakness of GBP. • The last decline to -23 indicates weakened UK sentiment dampening the Pound. • A measure of US consumer sentiment that can influence USD and Fed rate expectations. • News of China relaxing its 125% tariff on some US imports can be supportive of risk appetite and lift the Dollar. • Conflicting labor data creates uncertainty in the path of the USD, driving short-term volatility. • Recovering currently around 99.80, DXY performance is indicative of overall USD strength versus major currencies. • Continuous US negotiations with significant Asian allies such as Japan and South Korea are likely to have an effect on the risk tone and market sentiment. GBP/USD pair is presently affected by a combination of economic and geopolitical influences forming the overall market sentiment. In the UK, confidence among consumers has suffered, with April’s GfK Consumer Confidence index plummeting to -23—its lowest since November 2023. The decline reflects increasing unease among households regarding increasing living expenses and overall economic uncertainty. Consequently, investors are keenly watching for upcoming UK Retail Sales data, which will give a better indication of the strength of domestic consumption and the state of the economy. GBP/USD DAILY CHART PRICE CHART SOURCE: TradingView Internationally, news is that China can temporarily suspend the 125% tariff on specific US imports such as medical devices and aircraft leasing. This piece of news has created a glimmer of hope regarding global trade relations and has the potential to have wider repercussions for market mood. Furthermore, developments in US trade talks with Asian allies like South Korea and Japan are of keen interest among market participants. In the US, mixed labour market indicators—such as higher jobless claims while continuing claims are declining—continue to guide expectations on economic strength and near-term policy interventions. TECHNICAL ANALYSIS GBP/USD broke below the major psychological support line of 1.3300, indicating the possibility of changing short-term market sentiment. The pair is now trading around 1.3290, showing stronger bear pressure. If the selling momentum remains intact, the next support region would be witnessed around 1.3250. On the positive side, any bounce can be expected to encounter resistance around 1.3350, where recent consolidation has taken place. Traders will be looking for confirmation signs in the form of candle patterns or volume changes to gauge the power of this breakout and determine the probability of a sustained trend reversal or a short-term pullback. FORECAST If stronger-than-anticipated consumer demand in the latest UK Retail Sales figures is reflected, this may reclaim some of the confidence in the Pound, leaving some space for a short-term rebound in GBP/USD. Furthermore, if US economic signals like the Michigan Consumer Sentiment Index are lower than anticipated, this may weaken the Dollar and favor a recovery in the pair. Here, GBP/USD may test the resistance levels near 1.3350 and may reach as high as 1.3400, if risk sentiment on the back of easing global trade tensions. Conversely, sustained UK weakness, especially if Retail Sales fall or consumer sentiment continues to be weak, may intensify pressure on the Pound. If the US Dollar continues to hold firm—driven by hopes over trade negotiations or steady labor market data—the pair can continue its fall. A break below 1.3290 may open the gates towards the next support at 1.3250, and if bearish pressure continues, further losses towards 1.3200 cannot be excluded.

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Currencies GBP/USD

Pound Sterling Resilient Against Strong UK Labour Market Data and US Tariff Volatility

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  • April 15, 2025
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The Pound Sterling has gained robustly after receiving strong UK labour market data covering the three months to February, with the economy creating 206K jobs above forecast. Though the unemployment level was unchanged at 4.4%, the growth in wages was mixed as average earnings, excluding bonuses, increased at a marginally reduced rate than predicted. Investors are now waiting for the March UK Consumer Price Index (CPI) reading for more information on the nation’s inflationary trends. In the meantime, uncertainty over US trade policies, especially over automobile tariffs, has put pressure on the US Dollar, making the Pound more attractive. Consequently, the GBP/USD pair has hit a six-month high, with a short-term positive outlook. KEY LOOKOUTS • The UK jobs market recorded substantial expansion with the addition of 206K new jobs, a considerable increase compared to the last quarter’s 144K. This reinforces investor faith in the Pound Sterling. • Although average pay excluding bonuses rose at a reduced rate of 5.9% (lower than predicted 6%), wage growth continues to be positive, with expectations of the Bank of England lowering interest rates in May. •  American President Trump’s indications of suspending automobile tariffs have created doubts about the future direction of US trade policy, which is impacting the US Dollar’s safe-haven appeal. •  Markets will be focusing closely on the UK Consumer Price Index (CPI) for March, which is predicted to register core CPI expansion at a consistent 3.5%, and which will be offering additional pointers on the monetary policy approach of the Bank of England. The Pound Sterling has gained appreciably with the publication of better-than-expected UK employment figures for the period up to the end of February, the economy having created 206K new jobs, thus exceeding forecasts. This upbeat labor market performance has boosted investor confidence in the British currency, although mixed wage growth data has kept market expectations for the Bank of England’s monetary policy largely unchanged, with the possibility of a rate cut in May. Meanwhile, uncertainty surrounding US trade policies, particularly President Trump’s consideration of temporarily suspending automobile tariffs, has pressured the US Dollar, further supporting the Pound’s upward momentum. With the UK Consumer Price Index (CPI) data for March set to be released, investors are keenly awaiting this data to gain insights into future inflation trends and their potential impact on the UK’s economic outlook. The Pound Sterling has risen after robust UK employment figures, with 206K jobs created in the three months to February, beating forecasts. Uncertainty about US trade policy, especially over car tariffs, has also boosted the Pound’s advance against the US Dollar. •  The UK economy created 206K jobs in the three months to February, well above the 144K created in the last quarter. •   The UK unemployment level stayed steady at 4.4%, in accordance with estimates. •  Median earnings after excluding bonuses rose by 5.9%, a tad less than the forecasted 6%. •  Heterogeneous wage growth data will not materially influence market forecasts for Bank of England monetary policy. •   The market is waiting for the UK CPI data for March to determine inflation trends and possible effects on interest rates. •  US President Trump’s indecision regarding automobile tariffs is depressing the US Dollar, eroding its safe-haven status. •  The GBP/USD currency pair hit a six-month high, with a positive short-term outlook as a result of the Pound’s strength and weakening Dollar. The Pound Sterling has gained strength after the publication of robust UK employment figures for the period ending February, as 206,000 new jobs were added to the economy, beating forecasts. This good labor market performance has given a welcome boost to investor sentiment in the British currency, even though mixed results have been seen in wage growth. Even though earnings growth has eased a little, the overall employment figures indicate a strong economy, making the Pound a good choice for investors. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView At the same time, uncertainty over US trade policies, such as US President Trump’s possible suspension of automobile tariffs, has put further pressure on the US Dollar. This has helped the recent appreciation of the Pound versus the Dollar, as the market re-evaluates the appeal of the US currency. With investors looking for UK inflation figures for March, the focus will shift to how inflation trends could impact the Bank of England’s future decisions and further shape the economic forecast. TECHNICAL ANALYSIS Sterling Pound has displayed robust bullish momentum, as the GBP/USD pair hit a new six-month high at approximately 1.3235. All short-to-long Exponential Moving Averages (EMAs) are trending up, a sign of good market sentiment and that the uptrend could continue in the short term. The 14-day Relative Strength Index (RSI) has also shown a V-shaped rebound from 40.00 to 65.00, which is an indication of good buying pressure. On the negative side, the most important support level is in the vicinity of the 61.8% Fibonacci retracement level at 1.2927, while the 1.3430 level is major resistance, which could be the level for future price action depending on future economic news. FORECAST The Pound Sterling is likely to continue its bullish trend with the support of the positive UK employment news and the overall market mood. With the economy creating more jobs than expected, investor sentiment in the Pound is still strong. Moreover, the stress on the US Dollar from continued trade policy uncertainty under President Trump’s regime further supports the Pound. If the next UK inflation figures for March show consistent inflation, it may give additional support to the Pound, pushing it towards the next resistance level of 1.3430 against the US Dollar. However, there are risks that may dampen the Pound’s momentum. Conflicting wage growth data and the threat of lower recruitment on account of increased National Insurance contributions from April may temper the positive outlook. Additionally, if the upcoming UK CPI data for March reveals lower-than-expected inflation or signals intensifying economic problems, the Bank of England may shift to a more dovish stance, which may create

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